Pentane

Every entrepreneur under the sun is struggling in one way or another. What people see now is how we scaled BottleKeeper to $8M in 3 years and then got acquired 5 years later as an 8-figure company. But what they don’t see is how often we broke sh*t, made massive mistakes, and almost completely burned the company to the ground on more than one (or 25) occasions. Here’s an example, in 2018 we had a $1.5m net profit on roughly $14m in revenue. Then we (and by “we”, I really mean “I”) violated our own internal principles and got too heavy with office and payroll. The result is that we did about the same revenue in 2019 (which was a struggle) and had a net loss of $1.5m. That’s an expense increase of THREE MILLION DOLLARS. Holy hell. But we course-corrected and made really hard decisions to lay off people that we really personally liked, and saved the company. In fact, we thrived. These challenges are things that EVERY entrepreneur faces. So if you're out there grinding away trying to build something, You're not alone in the struggle. It's not just you, it’s part of the journey. So it’s really important to take care of yourself both mentally and physically. And keep going. Every entrepreneur you look up to has been exactly where you are today. P.S: Follow me for more content like this.

Most founders now don’t understand finance. When I first started BottleKeeper, I didn’t either. I didn’t have a finance background. P.S: Follow me for more content like this.

You don't need a CFO to understand your eComm business. You don’t even need to play one on TV. You DO need to understand some basic financial concepts that drive your company, And have accurate books and a P&L (you don’t need a CFO for this, you need a bookkeeper…). After these basics are met, let a tool like Pentane do the complicated stuff. It’s true. Pentane simplifies the complex data inside your company and financial statements to show you how to use ad spend, revenue, and expenses in order to operate profitably, Tailored specifically to your company, situation, and profitability goals. So that you can make sense of what’s happening WITHOUT a PhD in accounting. Again, you still need a good bookkeeper/accountant to handle the day-to-day financial tasks. And if you’re a consumer product company/making a physical good, you need to be using accrual accounting (as opposed to cash-based accounting). But that’s pretty much it. We’ll take care of simplifying the complex so you can stop operating in the dark. (Trust me, it's a game-changer). Want to see if Pentane can help? Book a demo to see if you qualify for a free trial: https://lnkd.in/gWicKpqQ P.S. - Get some value? Follow me for daily posts.

How Pentane helped this company increase revenue by 234.2% (And become profitable) Picture this: A consumer brand that's crushing it with their high-end gear. They've been in the game for over 5 years, built a multi-million dollar business, but there's a problem - they can't figure out how to turn a profit and, instead, are losing significant amounts of $$ each month. Sound familiar? That's where the CEO found himself. P.S. - Get some value? Follow me for daily posts.

The "growth-at-all-costs" strategy is a trap filled with pain. It's easy to get caught up in the hype of big investments and valuations, Particularly because the media celebrates it. But trust me, that path is painful and dangerous. The truth is, the days of easy money are over. Investors aren't throwing around cash like they did a few years ago, Particularly in eComm. And even IF you do manage to secure some funding, it’s likely to be expensive. Plus, the chances of getting acquired or going public? Extremely low (that’s one of the main drivers to the drying up of cheap investment capital). Yet, we still see it happen over and over. Companies raise a bit of early-stage capital then chase after growth like crazy, burning through cash like there's no tomorrow. But when the money dries up and capital to fund operations is no longer available, the company dies (along with all the hard work, hopes, and dreams). The thing is if they had just focused on being efficient and profitable from the start, They could have avoided all that pain. Sure, it might not have been as flashy as raising loads of capital, But it would have set them up better for both short and long-term success. That's why I'm a big believer in a more calculated approach. I don't want to run a business that's always chasing the next big fundraising opportunity, Only to come crashing down when things get tough and the underlying business isn’t sustainable. I'd rather build a company that is anti-fragile, something that can weather any storm. So, here's my advice: forget about growth at all costs. The stress will take years off your life. Instead, focus on creating a solid foundation for your business. - Make profitability your top priority - Approach fixed expenses (like payroll) as if you have $0 in the bank (even if you don’t…) - Remove emotion from decision-making as much as possible It might not be the most exciting approach, but it's the one that will keep you in business. Because at the end of the day, it's not about how fast you can grow. It's about creating something that lasts and allows you to sleep at night. Do you agree? P.S. - Get some value? Please reshare this.

Pentane can’t save you if you won’t save yourself. Let's face it, some CEOs are their own worst enemies. They're so caught up in their own vision that they can't see the harsh realities staring them in the face. And that spells disaster for the business. I’ll explain with an example. P.S. - Get some value? Follow me for daily posts.

"How many employees do you have?" is the wrong question. Yet it’s a question we’ve all heard. (And also been forced to answer) When has the number of employees inside a company been a measure of a company's success? It's like asking someone how well their marriage is going by inquiring about the square footage of their house. It's irrelevant, and frankly, a bit ridiculous. Now, I get it. Asking about whether or not a company is profitable isn’t exactly a great conversation starter. But that doesn't mean we should default to the employee headcount as the go-to metric for business success (especially internally). It’s a fake KPI. It's lazy and tells you nothing substantive about the health of a business. If you really want to find out how a company is doing, A far better metric to look at internally is revenue per employee (RPE). Why? Because RPE represents revenue and expense efficiency. It ensures that every single person you hire is pulling their weight and contributing to the top and bottom lines. It's quite common for eCommerce businesses to fall into the trap of hiring people to solve problems, WITHOUT considering whether those hires will actually contribute to the company and its revenue or negatively weigh on it. And before you know it, you've got a bloated payroll and a bunch of employees who aren’t specialized. By focusing on revenue per employee, you're forced to be strategic about hiring. You're not just bringing people on board to put out fires, You're building a team that's laser-focused on driving revenue and profitability. And THAT is the key to a healthy, thriving business. But the best part of this approach is the impact it has on your personal life. A healthy company creates flexibility. And that, ultimately, is what it's all about – building a business around your lifestyle, and not your lifestyle around a business. So the next time someone asks you how many employees you have, Smile and change the subject. They don’t know what you know. P.S. - Get some value? Please reshare this.

Imagine this: your eCommerce business is bringing in a solid $20 million a year. You're living the dream, right? Not entirely. I once consulted a company in this exact situation. Sure, they were generating $20 million a year. And doing “good” but not “great”. The root of their problem? A lack of understanding as to how the company actually made money (aka net profit). They didn’t know how to leverage advertising dollars to maximize net profit based on their company and expense structure. The company had significant fixed expenses that couldn’t be easily reduced, including costs for staffing and operational necessities. The challenge was that they didn’t understand how their low variable expenses (and resulting high contribution margin) meant they could stomp on the ad spend gas pedal to drive more net profit. Their return on ad spend (ROAS) could drop as low as 1.3 and they’d still be printing money. Now, I know what you're thinking. "Spend more $$$ and lower my ROAS? Are you insane?" But it’s true. This strategic move allowed them to boost their net profit YOY by over 50%. The truth is, in any business fixed costs are a fact of life. But once you've covered these costs through revenue, Every extra contribution margin dollar (CM$ = revenue - variable expenses) that comes in goes straight to net profit. It's like a direct deposit to your profitability account. My point is - it’s not enough to just know your revenue and expenses. To drive outsized outcomes you must also understand how to strategically leverage ad spend to maximize profitability. Arm yourself with the RIGHT metrics and watch your eCommerce business thrive. P.S. - Get some value? Follow me for daily posts.

“Where have you been my whole life?!” You’d think this is something my wife said to me when we met. But it isn’t. Yesterday I did a Pentane demo for an eCommerce company. 20 minutes into the call, the founder goes silent. He looks up and says “Adam, we’ve been searching for these answers. Where have you been my whole life?!” And this is exactly why I built Pentane. I’ve been an eCommerce founder. I scaled my eCommerce brand from $0 to $8M in revenue in just 3 years with 0 employees or investors. P.S. - Get some value? Follow me for daily posts.

Adding more employees won’t solve your problems. (eCommerce founders, I’m looking at you) At least if you don’t know how the business is going to pay for them… I've seen it a million times. P.S. - Get some value? Please reshare this.